Monday, 15 October 2012

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One key measure of global economic health is how much freight – raw
materials and manufactured goods – is being shipped around the world and
in the United States. In July of this year the Balctic Dry Index, a
measure of the price to pay for the movement of raw materials by sea, hit a record breaking low and signaled a steep decline in global manufacturing and consumption.
This was a key indicator for where the economy was headed on a global scale.
Just a few months later we’ve received confirmation of this trend
from FedEx, one of the largest shipping companies in the world.
Yes, Americans are still shopping, but they aren’t shopping at the
same pace they were five years ago. Their jobs have been eliminated,
wages reduced and credit has been restricted. FedEx’s latest earnings
report is proof positive of this:

Demand for FedEx services is down overall for a variety of reasons,
including less retail consumption in an already struggling economy and a
customer shift to cheaper shipping methods.
As a result of weakening earnings, profits and customer demand for
their services, FedEx has been forced to implement internal cost-cutting
measures, and as you may have already guessed that means staff layoffs:

Fedex, the global delivery company, said Wednesday it was planning to cut “several thousand” people from its workforce via a voluntary departure program beginning early next year.
Company chairman Fred Smith said at an investment conference in
Memphis, Tennessee, that the cuts would come in the company’s Fedex
Express global express delivery service, and in the US unit, Fedex
Services.
The cuts are part of a plan to boost profits by $1.7 billion by 2016, mainly through intensified cost reductions.
They also come in the wake of the company’s warnings that its business is being hit by the global economic slowdown.Source: France 24 via What Really Happened?

While official unemployment reports attempt to make the case for an
economic and jobs recovery, the fact of the matter is that Americans are
being laid off across the country in just about every key industry, and
as ridiculous and unbelievable as it may sound, this may just be the
beginning.
Earlier this week we learned that Darden Restaurants (the parent company of Olive Garden and Red Lobster) will be laying off workers citing the economy, as well as government regulation, namely Obamacare going into effect in 2013.
Prominent CEOs around the country see the writing on the wall, as do many political and financial insiders such as financier George Soros who warned earlier this year that even the best-case scenario will be painful:

I am not here to cheer you up.The situation is about as serious and difficult as I’ve experienced in my career.…
We are facing an extremely difficult time, comparable in many ways to
the 1930s, the Great Depression. We are facing now a general
retrenchment in the developed world, which threatens to put us in a
decade of more stagnation, or worse.The best-case scenario is a deflationary environment. The worst-case scenario is a collapse of the financial system.

Plan on the worst-case.
The collapse of the American way of life is happening before our
eyes. It’s been at least four years since this recession began, and we
may have a much longer road ahead of us. The Great Depression was an
event that spanned at least ten years, followed by five years of global
war.
We’re looking at a series of events that may last not for 18 months
(like typical recessions do) or a few years, but perhaps a decades-long
decline that destroys the wealth and stability of the United States of
America.